An Amazon smartphone? It could happen next year, analyst says

Amazon could have a smartphone on store shelves by the fourth quarter of next year according to Citigroup analyst Mark Mahaney. “Based on our supply chain check, we believe FIH is now jointly developing the phone with Amazon,” Mahaney wrote in a research note. “However, we believe that Amazon will pay NRE to FIH but the device and multiple components will actually be manufactured by Hon Hai’s TMS business group.” Additionally, Mahaney said that Amazon will likely use a Texas Instruments OMAP 4 processor, and that it will adopt Qualcomm’s dual-mode 6-series baseband chip as well. Read on for more.

“For a normal brand like HTC, they need to price the product at US$243 to make 30% gross margin,” Mahaney wrote. “If Amazon is actually willing to lose some money on the device, the price gap could be even bigger,” he explained, noting that Amazon’s device could be sold for between $150 and $170, or about the price it will cost to build the phone.